Im investing $7000 Into These 20 Stocks. What do you think?

I dont like the idea of mutual funds, CD's, IRA's and all the other stuff i just want to invest in stocks. With the $7000 that i have i want to invest $350 into each of the following stocks. What do you think?

• E*Trade [ETFC] - $350
• International Coal Group [ICO] -$350
• CitiGroup [C] -$350
• BlockBuster [BBI / BBI.B] -$350
• YUM [YUM] -$350
• eBay [EBAY] -$350
• Kinross Gold [KGC] - $350
• Accuray [ARAY] - $350
• General Electric [GE] - $350
• Merrill Lynch [MER] - $350
• Intel [INTC] - $350
• PALM [PALM] - $350
• Electronic Arts [ERTS] - $350
• St. Joe [JOE] - $350
• Microsoft [MSFT] - $350
• Wachovia [WB] - $350
• Cree [CREE] - $350
• Energy Conversion Devices [ENER] - $350
• Annaly Capital Management [NLY] - $350
• IMAX [IMAX] - $350
Additional Details
Acting on some of the advises i have received can someone help me narrow it down to 10 companies in 10 different sectors?

Interesting question. With the amount of money you have I definitely thing you should narrow the number of stocks you want to invest in to probably less than 10... probably 5 or so. A general rule I heard is you want to try to keep your trading costs to less than 1.5%... If you're commissions are $8/trade, you want to invest in chunks of $1067+ so the trading costs don't cut into your profits too much (1 buy + 1 sell = $16, .015/16=1066.67). The bigger the chunks, and the lower your commissions, the more you get to keep.

I plugged your numbers into a spreadsheet I created to evaluate stocks. I use this spreadsheet purely to eliminate stocks from my consideration, once this is done you should still additional evaluation to be done. So do your own due diligence. I created the spreadsheet based on the Stocks to Watch worksheet from Jason Kelly's book "The Neatest Little Guide to Stock Market Investing". I highly recommend reading this book, it gives some good insight on different methods of evaluating stocks. I eliminated and arranged the stocks according to my preferences which may not match up with yours.

I don't know how you arrived at this group of stocks. I would keep on looking. You may have some insight that I don't. (I'm not saying it's right or wrong, but I would take some more time and get some more ideas and refine your list a little more.)

First I arranged your companies by industry and arranged each industry in a order of preference a determined by valuation ratios (p/e, p/s, p/b)... I also looked at 5 years of sales numbers to help come up with an order of preference.... here's what I came up with (again this is very rough and only based on the numbers):

WB Financial
NLY Financial
C Financial
MER Financial
JOE Financial
ETFC Financial

MSFT Technology
INTC Technology
ERTS Technology
PALM Technology
CREE Technology
ENER Technology

YUM Services
EBAY Services
BBI Services

KGC Basic Materials
ICO Basic Materials

GE Conglomerates
ARAY Healthcare
IMAX Consumer Goods

I then narrowed the field to 10 by picking the top few (or one) from each industry:

WB Financial
NLY Financial
C Financial
MSFT Technology
INTC Technology
ERTS Technology
YUM Services
KGC Basic Materials
ICO Basic Materials
GE Conglomerates

I again took these 10 and arranged them in rough order of what I perceived best to to least best:

MSFT - Microsoft Corp
NLY - Annaly Mortgage Ord Shs
KGC - Kinross Gold Ord Shs
WB - Wachovia Corp Ord Shs
C - Citigroup Ord Shs
YUM - YUM! BRANDS INC
GE - General Electric Ord Shs
INTC - Intel Corp
ICO - International Coal Group Inc
ERTS - Electronic Arts Inc

I just tried to narrow your list as you suggested, I'm not recommending these stocks.

P.S. Sorry some of the formatting didn't come through.

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Good luck!

I think you will may a lot of fees. Diversify by choosing 3 different sectors. MSFT, ICO, NLY.

I think it sounds like a great like to invest in.

looks like a good list...you will know in a year or two...........

In my opinion, if you have $7,000 to invest and want a better, safer return, you're better off taking out 7 option credit spreads and receive $350 into your account for each of one of the above.

Your total risk will be $7,000 for seven credit spreads and you can make them bullish or bearish, depending on your view of the stock. You will also receive an extra $2450 into your account, giving you a balance of $9450 instantly.

Should the stock go in a different direction than you anticipate, you simply adjust your position by "rolling out" to a later expiry month, or "rolling out and down/up" if need be.

This is a much safer investment strategy than simply buying the stocks outright. The term of your investment is about 4-6 weeks, then you do it all again. If you annualise your returns doing it this way, you'll be blown away at the results.

if your happy it's an OK list.

i'm investing in stocks that have dropped a significant amount and will drop a bit more.... then when the market rebounds, you will have a major profit (risk stocks gain more) you're going to safe. starbucks, hot topic, pepsi, agriculture....

I think broker fees for buying 20 different stocks with $7000 will put you 5% in the hole from the beginning.

Why not narrow your list of stocks down and choose the top 3 or 4?

I work for merrill lynch and I've been a broker for 13 yrs now and I have to say that what you want to do isn't the best option for your money, if you're looking at long term(5yrs+), well then I guess it's an "ok" concept although the stocks you have selected some are great ideas, some are not.... It depends on what specifically you're looking for.

Personally, i'd suggest you take the $7000 and invest $3500 in 2 stocks, yes just 2 stocks... if you choose to invest in all those stocks then you're surely going to lose some money with several of those stocks, sure years from now you'll make some money off of just about all of them but the payout may not be much.

I'd suggest, if you were my family or my friend... that you invest in Yum brands, which you named and Johnson & Johnson...

I can't really go into much details but, im sure if you do some research you'll find out why I'd tell you to buy those. It amusing how just a few short years ago when yes, even Merrill Lynch wasn't suggesting to purchased Google stock to anyone, but I called everyone I knew and said, "buy all the stock you can" and had you listed to me and spent a mere $5000 just 12 short months later, it would have been worth nearly $40,000.

**had you invested $10,000 in 1970 in Walmart... today it would be worth just under $48 million dollars.

I think your positions are too small to move the needle, I'd focus on your top 5 and set a small stop loss 5-8% on each this is a bear market and easy to get burned. Sell your loosers and keep your winners.

Good luck.

I agree with crim, pick your top 5 and stay diversified in different sectors so you dont get hurt badly on a bad day, you've got too much exposure to the same sectors. Bad days will be happening all the time with the state of the economy

You're going to be paying alot of commissions too

And i would recommend not buying an entire position of a stock in 1 sitting

May I suggest to you that you forget the idea of investing in 10 different stocks with $7000. It just doesnt make any sense. The more stocks you buy, the higher your chances of incurring a loss.

Remember, if you lose 50% on a trade, you have to make 100% to get it back.

Your first option should be to fund fully a retirement account. If you do this, and you have extra cash, then one of the best things you can do is open a DRIP Plan.

Go to : low-cost-stock-recommendations

.com

They have a DRIP Section and it is free.

These powerful investment plans are seldom talked about because brokers make very little money when they suggest them. Yet, they have proven to be one of the best, if not the best, long-term strategy on Wall Street.

They are perfect for small investors, as well as big investors. They are safe and allow you to not care about whether the market is going up or down. They are a must for any serious investor.

I strongly recommend looking into it. They are great plans.

Good Luck

PS.....the individual who said ......if you had invested $10,000 in Wal-Mart in 1970 would now be worth $48 million......lol....is so far off track....it is funny

I think you should send me the money instead :P

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